Zara Case Study

This model was developed around late 1990s, and Zara has been at the top of this revolution along with other large retailers such as H&M and Topshop.”(From Zero to Zara: The Secret of Fast Fashion)

Second, in fulfillment, we can also see speed in responding to demand. For example, the replenishment, as well as production will be optimized according to supply and demand as quickly as possible. Besides, the fulfillment will commonly completed in one or two days, clothes flowed quickly, and without stopping, from factories to DCs to stores, where they were immediately put on the sales floor. Third, in design and manufacturing, we can find how Zara respond quickly to demand. Zara brought out new items continuously throughout the year, including both changes to existing garments and entirely new creations. The network of production had made design from conception through production and into the DC in as little as three weeks. Besides, Zara did not have to predict what would be selling six months, or even one month, in the future; it could continuously sense what customers wanted to buy and respond “on the fly.” All these operations reflect the speed-chasing and target-oriented nature of Zara business.

Zara International is considered a high end clothing store that is affordable. Due to its quality in fashion, low prices and immediate availability, popular stores such as Gap and H&M fail to keep up with Zara’s success. Zara’s well known tactic of fast fashion has separated them from their competition. The ‘fast fashion’ objective is to distribute top trends of fashion within the runway to customers by selling them in local stores. Zara has been able to achieve the fast fashion perspective by hiring approximately 200 people that will assist in getting these trends out in stores within a matter of weeks.

Zara’s strategy is to offer cutting edge fashion at affordable prices by following fashion and identifying which styles are “hot”, and quickly getting the latest styles into stores. They can move from identifying a trend to having clothes ready for sale within 30 days (whereas most retailers take 4-12 months). This is made possible by controlling almost the whole garment supply chain from design to retail.

Zara 's combination of cutting-edge fashions and culture lends itself well to a European-style, fashion-conscious consumer. While this type of consumer can be found in New York, this is not representative of the entire US market. Retailers in small towns and urban sprawls rely more on a shopping mall atmosphere. Adapting that strategy would undermine Zara 's image. It is therefore recommended that Zara target only major metropolitan areas which would likely have higher concentrations of fashion-minded individuals.

The basic strategy for fighting competition is to attract buyers at lower prices, more unique designs, high-quality design, efficient customer service and solid image brand. Thus bargaining power of buyer for apparel industry is high as the products falls under the basic needs in human lives. There is no much difference in terms of products offered by the apparel company, so if buyer is unhappy with the product or service they can easily switch to another brand. Thus, Zara are trying to strengthen its position in the market by using their unique strategy by giving priority to buyer to meet their special needs.

In society is such opinion about prices, if the product price is low, it means that the quality is low. People think that everything with high prices has high quality, but it is not true. In this case Zara did not want to be seen as a low quality brand. Hence they create products of high quality. They wanted to be first between fashion brands and add new designs to their collections twice a week. For customers is not good to look the same designs two week, the company knows about customers needs and they remove the products that do not sell well and changes the stores’ organization twice a week. Products can be different by their functional aspects, by the price and the quality. Zara differentiates by these elements. The main point of the differentiation strategy for Zara is combination of the low price and high quality and if other companies want to be desirable, they must do the same. Zara tries to decrease the product in the inventory and increase the number of variable

The core concept of Zara 's business model is they sell "medium quality fashion clothing at affordable prices", and vertical integration and quick-response is key to Zara 's business model.  Through the entire process of Zara 's business system: designing, sourcing and manufacturing, distribution and retailing, they presented four fundamental success factors: short cycle time, small batches per product, extensive variety of product every season and heavy investment in information and communication technology.  These four elements are involved in every aspect of the business.

Zara is a clothing company that was founded in 1975 and came from Spain. Its under Inditex group which owns other brands such as Massimo Dutti, Pull & Bear, Oysho, Uterques and many more companies. Zara grew very fast and currently in 2012 has 1,617 stores worldwide. With a large name in the fashion industry, besides that, Zara faces tough competition internationally including H&M, Benetton, and GAP. In order to keep up with the speed chic, Zara need to keep up also with the information system to run their business.

Zara's system starts nearly to the traditional retailers – with a fundamental demand. The qualification is that rather than asking for most of the sum for the season, Zara just demands a little measure of stock. Once the stock hits the stores, Zara assembles bargains data and separates each SKU's arrangements against supply. Zara does altogether more, it separates execution of features of different SKUs. For example, they may recognize that pants with patches offer better than pants without patches, or that particular tints or fits move faster than others. Zara by then uses these bits of information to coordinate their following solicitations. They will design and deliver models that have the most renowned features to satisfy ask.

Zara adopts the minimal advertising strategy spending around 0.3% comparing to industry average of 3-4% (Pearson). Retailer uses this to invest on state-of-the-art stores in prime locations. This is quite a strategic move for Zara as it could be clearly seen that they positioned themselves close to luxury brands such as Chanel. ‘It shares Champs Elysees real estate with Louis Vuitton, Tiffany & Co, Guerlain and Cartier’ (Doran, 2014). By having stores near luxury brands, customers could easily links Zara to these prestige brands, hence, increasing its brand equity. These stores also attract new visitors like tourists through high footfall locations. Moreover, the store concept is carefully designed with luxury cues such as faceless white mannequins, minimal mirrors, and a monochrome colour palette. Secondly, Zara uses fashion campaigns to communicate its positioning. It was reported that Zara hired Freja Beha Erichsen, the same face appearing in Chanel campaigns and asked Patrick Demarchelier to make SS14 campaign (Cabon, 2014). Communication through traditional tools like H&M may decrease the exclusivity and luxury of Zara’s brand. Hence, selective quality brand communication creates higher brand image. From the analysis above, Zara depends on its fashionable products as its main attraction. The changing stream of products makes consumers to visit stores 17 times annually (Choi, 2014). Therefore, the retailer

Zara is an international retailer that is continuously growing in popularity due to the store’s trend-sensitive and affordable styles. Inditex, Zara’s distribution group, is one of Spain’s greatest successes in that they have dominated the global market. Their unique business model and marketing tactics have a lot to do with this company’s worldwide success. This retailer exhibits a creative and eco-friendly business plan that integrates design, just-in-time production, marketing and sales. With a vertically integrated supply chain system, Zara controls product design, development, manufacturing, selling and distribution to retailers, product service and advertising.

At the heart of Zara 's success is a vertically integrated business model spanning design, just-in-time production, marketing and sales. The key to this model is the ability to adapt the offer to customers desires in the shortest time possible. For Zara , time is the main factor to be considered, above and beyond production cost. The group believed that vertical integration gave it more flexibility than its rivals to respond to fickle fashion trends. With the European markets becoming saturated, Zara had been looking at stretching its product line and furthering its global expansion.

The company’s vision as stated on the website: “Zara is committed to satisfying the desires of our customers. As a result we pledge to continuously innovate our business to improve your experience. We promise to provide new designs made from quality materials that are affordable”.

The architecture department is responsible for whole outlook of new store ‘Zara’- the external and internal details. In other words it has to complete the interior and exterior design of the store.